Legislative News

This CLIENT UPDATE includes amendments and additions to the legislation of the Republic of Kazakhstan (“RK”) in December 2013.

The legislation outlined in this Client Update concern both public and private sectors. Some of them may be of interest to you as it may affect your business in Kazakhstan in certain way.

This month we would like to draw your attention to the following legal acts:

SUBSOIL USE

1) The list of subsoil use blocks to be tendered in 2014 approved.

The Government of Kazakhstan adopted two resolutions approving the subsoil use blocks to be tendered in 2014.

1) The Resolution of the Government of the Republic of Kazakhstan dated 20 December 2013 № 1379 approving the list of three oil and gas blocks to be tendered.

This Resolution came into force on 9 January 2014.

You can find the list of the subsoil use blocks following this link.

2) The Resolution of the Government of the Republic of Kazakhstan dated 28 December 2013 № 1416 approving the list of one hundred and five subsoil blocks to be tendered.

Among them, thirty subsoil use blocks are at production stage and seventy five blocks are at exploration.

This Resolution came into force on 15 January 2014.

You can find the list of the subsoil use blocks following this link.

Please note that our subsoil use lawyers are ready to assist you with preparation of tender documents and to render full legal support in the whole process up to obtaining subsoil use right.

THE CUSTOMS UNION

1) President of RK signed the Law «On changes and amendments in certain legal acts of RK on public procurement».

The Law introduces national treatment as set forth by the Agreement on Public (municipal) Procurement, which came into force on 1 January 2012. The national treatment regime allows goods, works and services of participating countries of the Customs Union the access to public procurement on equal terms with those of domestic origin.

Also, the Law sets forth creation of the unified organizer of public procurements. The unified organizer will function at the republican and local levels. The organizer will be responsible for organizing and carrying out public procurements by means of tender and auction on government-funded programs and/or on goods, works and services as determined by the Government.

The Law comes into force on 24 January 2014.

2) The President of RK signed the Law “On ratification of the Agreement on application of information technologies when exchanging electronic documents in foreign and mutual trade on the integrated customs territory of the Customs Union”.

The Agreement introduces the system of exchange of electronic documents in foreign and mutual trade on the Customs Union territory.

According to the Agreement if legislation of a participating state requires that the document be in writing, the electronic document prepared as per documentation rules and requirements set out by the Customs Union Commission is deemed conforming to such requirement.

The Agreement came into force on 15 January 2014.

TAXATION

1) On 5 December 2013, the President of RK signed the Law «Concerning amendments to certain legislative acts of RK related to taxation». We mentioned about the draft law in our October edition of the Monthly Client Update.

Just to recap, the Law increases excise tax for alcoholic and tobacco products, as well as transport tax and property tax. Also, the base value of a dwelling per square meter was increased by two times.

The Law came into force on 1 January 2014.

DRAFT LAWS

1) On 8 January 2014, Mazhilis (the Lower House) of the Parliament of RK approved theProtocol ratification between the Government of the Republic of Kazakhstan and the Swiss Federal Council on amendments to the Convention on avoidance of the double taxation concerning taxes on the income and on the capital and the Protocol signed in Bern on 21 October 1999 (Astana, on 3 September 2010).

The Protocol sets amendments in relation to exchange of information. Currently, the Convention does not allow exchange of information for the purposes of tax evasion prevention due to the Swiss Law on Confidentiality of Information.

According to the Protocol, competent authorities of contracting states share information, which could be relevant for fulfillment of the Convention terms or administration or enforcement of national legislation in relation to taxes, without restrictions set forth by Article 1 of the Convention.

Hence, the Protocol requires that both states exchange information regardless of the law on confidentiality.

2) On 15 January 2014, Mazhilis of the Parliament of RK approved the Draft Law “On ratification of Agreement between the Government of Kazakhstan and the Socialist Republic of Vietnam on encouragement and mutual protection of investments”.

The Agreement requires that each contracting party encourage and set favorable conditions for investments from another contracting party on its territory, and recognize such investments in accordance with its national legislation. Pursuant to the Agreement contracting parties must ensure in relation to use, management, operation, sale and any other disposal of investments from a contracting party on the territory of another contracting party the conditions not less favorable than those applied in the same situations with respect to investments from any other third state.

Information contained in this Client Update is of general nature and cannot be used as legal advice or recommendation. Please seek for a specific advice in relation to any questions. Please note that Kazakhstan and Turkmenistan are emerging economies and their legislation and legal systems are in constant development. Should you have any questions or would like to discuss subjects addressed in this Client Update please contact us.